U/S LEVEY LAUNCHES U.S./UAE JTFCC

S E C R E T ABU DHABI 000409

SIPDIS

C O R R E C T E D C O P Y (ADDED CLASSIFIED BY
LINE)

NOFORN
SIPDIS

STATE FOR EB (A/S WAYNE),EB/ESC/TFS (JSALOOM),NEA/ARPI
(RSMYTH)
TREASURY FOR U/S LEVEY, PHEFFERNAN, RLEBENSON
FBI FOR FWAIKART, MMOREHART, JHERRING
CIA FOR CTC/FINO
DHS FOR DHS/ICE, FINANCIAL AND TRADE INVESTIGATIONS,
KDELLACOLI

E.O. 12958: DECL: 08/13/2015
TAGS: PTER KTFN AE
SUBJECT: U/S LEVEY LAUNCHES U.S./UAE JTFCC

REF: A. STATE 1287

B. 05 ABU DHABI 720

C. 05 ABU DHABI 4982

Classified by Ambassador Michelle J Sison for reasons
1.4 (b) and (d).


1. (S) Summary. The U.S. and UAE held the inaugural meeting
of the Joint Terrorist Financing Coordinating Committee
(JTFCC) in Abu Dhabi on January 24, 2006. The Central Bank
Governor began the meeting by questioning the value in having
a JTFCC, but by the end acknowledged that there could be
benefit in having a "brainstorming committee." He proposed
that the two sides should "formalize" the role of the
committee and put in some "transparency", so that the U.S.
does not "take unilateral action without first consulting on
issues that concern us." Although the pre-set agenda items
(charities, cash couriers, UN 1267 designations, Iraq
insurgency) were nominally covered, the UAE team focused
primarily on explaining their laws and provided few, if any.
examples of CFT enforcement action. Although the UAE fielded
a robust interagency team at the Federal level, only Central
Bank officials spoke, and there were no representatives from
Dubai. Notably, during a lunch sidebar discussion of
proliferation related entities, al-Suweidi indicated that it
is considerably easier for the Central Bank to close accounts
than to freeze them.


2. (S/NF) Summary continued. On January 25, U/S Levey met
with Dubai State Security Organization Chief Mohammed
al-Qemzi to discuss the Shamsi case, Saleh al-Suweidi, Human
Appeal International, and the Iraqi Insurgency. Al-Qemzi
recognized Human Appeal International as a charity "run by
the Muslim Brotherhood," and he promised to provide further
information to SIMO. He was not receptive to the idea of
designating Shamsi, explaining that he believes Shamsi has
been &rehabilitated,8 that he is no longer a threat under
current restrictions imposed by Dubai State Security, and
that designating him would not be to the benefit of the UAE.
U/S Levey's meetings with the Dubai Department of Islamic
Affairs and Charitable Activities and the Dubai Financial
Services Authority will be reported septel. End summary.

--------------
JTFCC MEETING
--------------


3. (S/NF) The U.S Delegation, led by U/S Stuart Levey,
included Adam Szubin, Senior Advisor to the U/S; Policy
Advisor Rachel Lebenson; Treasury Analyst Matthew Epstein;
Ahmed El Bashari, Treasury Middle East and North Africa
Specialist; Jason Beal, OFAC Attache in Manama; Michael
Morehart, Chief FBI Terrorist Finance Operations Section
(TFOS); and Frank Waikart, FBI Special Advisor to the NSC.
Embassy participants included Ambassador Sison, Econoff
Amanda Curtis, Pol/Mil Chief Michael Epperson, ALAT Athena
Lien, and DHS/ICE Attache Bill Wallrapp. The UAE Delegation,
led by Central Bank Governor Sultan Nasser al-Suweidi,
included Deputy Governor Mohammed al Falazi, three officials
from the Banking Supervisions and Examination Department, two
officials from the Anti-Money Laundering and Suspicious Cases
Unit (AMLSCU); four officials from the Ministry of Interior;
Dr. Mohammed al-Kamali from the Ministry of Justice; Yacoub
al-Hosani, Director International Organizations Department at
the Ministry of Foreign Affairs; Khaled al-Bustani, Assistant
Undersecretary, Ministry of Finance; State Security officer
Saif al-Muhairi; and Counselor Obaid Trais, Attorney
General's Office. Hassan al-Sheikh from the Ministry of
Labor and Social Affairs (the UAE body that regulates
charities) was unable to attend.


4. (S) U/S Levey opened the JTFCC by thanking the UAEG for
its participation and engagement on the issue of terrorism
finance. Levey underlined the critical role combating
terrorist finance plays in the global war on terror and
offered that it was because of close US-UAE cooperation to
date that he was there to help lead a bilateral interagency
forum. The Central Bank Governor agreed about the importance
of stopping terror financing, but stated that he did not see
value added in forming the JTFCC, telling the U/S to
"convince us." The Governor continued by saying, "Look how
much the terror finance network has shrunk since we first
started (after the September 11th attacks). I think we will
not be able to stop it 100 . If you are aiming for that,
then you should review your goals." Levey replied that
though it is tempting to celebrate what we have done
so far
and tick off accomplishments, we can not be satisfied and
must continue to work to shut these flows down. Al Suweidi
said that the UAE has already enacted a strong regulatory
framework, and it conducts trainings and conferences to
educate people in the UAE and regionally. He said he thinks
the main efforts now should be targeted at cultural changes,
i.e. addressing why people become extremists. "Your way is
not always the right way. We may have different opinions on
how to approach these issues, but we have the same end
goals." Ambassador and Levey both assured the Governor that
one of the purposes of the JTFCC is to provide a forum for
the UAE to discuss their approach. The Governor responded
positively to this, noting that there could be benefit in
having a "brainstorming committee." Governor al Suweidi
stated that the UAE would need a formal framework for the
JTFCC. "I also think we need to plug in some transparency in
how we do things. We do not want you to take unilateral
action without first consulting on issues that concern us."
Levey explained that the forum could be used as a venue to
discuss respective views and approaches. The Governor said
that the UAE team would consult internally and come back to
us.

Charities
--------------

5. (S) The representative from the Ministry of Labor and
Social Affairs (the UAE ministry that regulates charities)
did not attend the JTFCC for reported health reasons. As a
result, the team was unable to have a full discussion of
charity regulation and oversight. Abdulrahim al-Awadi, the
Executive Director of the Anti-Money Laundering and
Suspicious Cases Unit (AMLSCU),gave a brief overview of the
1974 federal law governing charities. He also noted that in
1993 the Central Bank issued a regulation that requires
charities to present their license from the Ministry of Labor
and Social Affairs in order to open bank accounts in the UAE.
Al-Awadi stated his belief that under Islam, end users of
charitable donations should be identified, but that donors
should be able to remain anonymous (Note: It was established
in a separate meeting reported septel that the rules of Islam
do not prohibit the government from knowing the identity of
the donating party). FBI TFOS Chief Michael Morehart
described the criminal side of charity enforcement in the
United States to show that the U.S. brings all resources
together to take necessary action. U/S Levey expressed his
desire to discuss CFT enforcement against charities with the
UAE in the near future.


6. (S) U/S Levey raised the issue of Human Appeal
International (HAI) and briefly outlined the USG's concerns
with this UAE-based charity. Governor al Suweidi said he
would discuss these concerns with the Ministry of Labor and
Social Affairs. (Note: On January 28, SIMO passed a copy of
the HAI paper to the federal State Security Department, and
Ambassador provided a copy to the Central Bank Governor. End
note.)

Cash Couriers
--------------

7. (C) Governor al-Suweidi explained that individuals must
declare cash imports of more than 40,000 dirhams (USD
10,900). He stated that the UAE may need to revise the law
due to the establishment of the GCC Customs Union, and that
the UAE will include a requirement to declare exports as
well. Al-Awadi reported that the Central Bank has conducted
trainings for customs officials, and he said that customs
submitted a report indicating that there has been an increase
in the number of declarations. He stated that this increase
indicates that the training and awareness campaigns have paid
off. Al-Awadi also noted that some cases of individuals
failing to declare their imports have been referred to
judicial authorities, but he was unable to provide any
details on the cases. During the January 25 meeting with SSO
Chief, al-Qemzi noted that SSO and Dubai Customs have agreed
that Customs officials will confiscate undeclared cash until
the conclusion of the investigation. Al-Qemzi noted that he
has been working with Central Bank officials to close the
loopholes in the law regarding cash imports, but he did not
provide specifics on what needed to be changed.

UNSCR 1267
--------------

8. (C) U/S Levey outlined that the USG is encouraging other
countries to sponsor UN designations, noting that the UN 1267
Committee issued a report stating that countries are not
submitting enough names. Levey explained the utility of
naming terrorist supporters and financiers ) if banks do not
have complete lists of these people and entities, we prevent
our financial sectors from acting as full partners with us.
Governor al Suweidi stated that the UAE does not have enough
resources to be able to do the requisite research to submit a
name for designation. He observed that the UAE asked the UN
a question about Viktor Bout two years ago, and is still
awaiting an answer. He noted that designations should not be
taken lightly. He also said that the UAE is a small country
and that since the U.S. has the network, ability, and
resources, it is logical that it has been able to submit the
most names for designation.

Iraq Insurgency
--------------

9. (S) Al-Suweidi opened the discussion of this agenda item
by noting that the UAE has been working with FinCEN requests
on the lists regarding Iraq insurgency members. He said they
are willing to cooperate if the U.S. will provide names of
people who are potential insurgency members. He said the UAE
is willing to watch any individuals we are concerned about.
U/S Levey mentioned Khalaf al-Dulaymi, an individual
designated pursuant to UNSCR 1483, which calls on member
states to freeze the assets of senior officials of the former
Iraqi regime. Levey thanked the Governor for his
cooperation.

Freezing vs. Closing Accounts
--------------


10. (C) After the JTFCC meeting, the Central Bank Governor
hosted a lunch for the delegation. During lunch, U/S Levey,
Ambassador, and the Central Bank Governor discussed
non-proliferation and Iran. U/S Levey proposed that the
Central Bank take the initiative in recommending to banks
that they close off business with entities known or believed
to be engaging in illicit financial activity with regard to
WMD. The Governor was receptive to this possibility, noting
that it is considerably easier for the Central Bank to close
an account than it is to freeze an account.

-------------- --------------
Dubai State Security - Shamsi, Muslim Brotherhood
-------------- --------------


11. (S) On January 25, U/S Levey met with Dubai State
Security Organization (SSO) Chief Mohammed al-Qemzi.
Ambassador opened the meeting by outlining the JTFCC meeting
and noting her disappointment that no one from Dubai
attended. Al-Qemzi noted that the SSO would have
participated had they been invited by the federal
authorities. Al-Qemzi outlined a computer software program
that SSO has developed for the Central Bank that tracks
transactions of the small exchange houses and hawalas. He
said that the software is a database with search tools, but
he noted that the Central Bank "needs to be convinced" to
implement it.


12. (S) U/S Levey raised his concerns about al-Qa'ida
financier Salah Salim Muhammad Ghanim al-Shamsi. Al-Qemzi,
confirming that al-Shamsi is an admitted financier of
al-Qa'ida and UBL, noted that since Shamsi's activities
predated the UAE's 2004 law criminalizing terrorist
financing, the UAE regrettably could not prosecute him for
his actions. Al-Qemzi, clearly prepared to respond, read
verbatim from a notebook the terms of Shamsi's release (NOTE:
Shamsi spent a combined 15 months in detention according to
Dubai SSO). According to al-Qemzi, Shamsi cannot leave the
country, he has to report on a regular basis to an officer,
he was forced to change his phone numbers so that his past
associates cannot contact him, the license for his religious
education center in Sharjah was cancelled, he cannot leave
Dubai without permission of the SSO, and he is not allowed to
visit the bookstore that he previously owned. Al-Qemzi noted
that Shamsi needed financial assistance to pay off his debts,
which was provided by the Ruler of Sharjah. Al-Qemzi stated
that Shamsi no longer had intelligence value, as Dubai SSO
has debriefed him on everything he knows. U/S Levey,
referencing Shamsi's substantial post-9/11 support for
terrorism, pressed al-Qemzi on the idea of designating
Shamsi. U/S Levey explained that the USG wants to hold people
like him accountable to send a message that it is
unacceptable to finance terrorism. Al-Qemzi stated that he
thinks the provisions of Shamsi's parole are very "strict and
severe." U/S Levey pointed out that Shamsi would have likely
received a 15 year prison sentence had his acts been
committed after the terrorism law took effect. Al-Qemzi said
that the UAE community associated with Shamsi knows about his
actions and that they are unacceptable, and he said he does
not see why the UAE needs to make the case public in the
international area. "This would just show people that there
are extremists in the UAE, and that does not benefit us."
Al-Qemzi also said that making Shamsi's actions public could
cause extremists to view him as a hero, and therefore
al-Qemzi believes that imposing restrictions is more
effective than publicly designating, adding "I think he is
suffering enough." U/S Levey made his disagreement clear.


13. (S/NF) Ambassador asked al-Qemzi if there have been any
financial prosecutions under the 2004 CT law. Al-Qemzi said
that in 2005 Ali Sa'id al-Kindi was sentenced to a seven year
imprisonment, but he observed that the case has not been made
public.


14. (S) When U/S Levey provided al-Qemzi with a copy of the
HAI paper, al-Qemzi glanced at it and immediately responded
"Yes, they are run by the Muslim Brotherhood." He then
provided an overview of the Muslim Brotherhood (MB) in the
UAE, noting that they have a secret network and agenda,
dealing with terrorists privately while presenting a moderate
face publicly. Al-Qemzi complained that the MB has
unjustifiably enjoyed a great deal of political support in
Europe and the U.S. as a moderate Muslim organization. "I do
not worry about takfiris, because I know what they look like.
I worry about the Muslim Brotherhood." He said that the MB
has worked to infiltrate the UAE's NGOs (specifically the
teachers, judges, and jurists associations),businesses and
government institutions to try to have some influence and
control over them. He said that local MB members were part
of a much larger, hierarchical MB network, under the
direction of the International Muslim Brotherhood and its
General Guide Muhammad Akif, dedicated to the establishment
of an Islamic empire. Al-Qemzi noted that the groups
associated with the MB actively try to frustrate steps the
UAE takes to counter the jihad extremist ideology, for
example MB groups complain publicly over things like the
UAE's moderate, unified sermons in the mosques. He concluded
by saying that one of the challenges in tracking and
targeting the MB network internationally is that it is good
at isolating itself. "When a part of the organization wants
to engage more directly in violence, they create a breakaway
group, and this makes it hard to connect the group directly
to the MB." As such, Dubai SSO considers the MB to be &very
dangerous8 and offered to share information with the USG on
its international activities. (Comment: In the past, Embassy
and SIMO officers have felt that UAE officials remarks about
the MB in the UAE were references to extremists in general --
and not to a specific, organized group. Al-Qemzi's comments
indicate the SSO is concerned about the MB as an
organization. SIMO in Dubai will follow up with the SSO to
get more details on SSO's perception of the MB in the UAE.
End comment.)

15. (S) U/S Levey told al-Qemzi that the U.S. is concerned
about unidentified al-Qa'ida financier Saleh al Suweidi, who
is reportedly in the UAE. U/S Levey told al-Qemzi that the
Saudis raised al Suweidi with him during his January 21-22
visit to KSA, offering that they had a phone number
associated with him (Note: FBI TFOS will try to obtain and
pass this number to UAEG. End note.). U/S Levey noted that
the Saudis said the UAE knew of Saleh al-Suweidi. Al-Qemzi
clearly did not seem to understand who U/S Levey was talking
about, but he said he would check into the matter and follow
up with liaison. (Note: The discussion between al-Qemzi and
U/S Levey on nonproliferation financing issues will be
reported septel.)


--------------
Comment and Next Steps
--------------


16. (S) Comment. When Homeland Security Advisor Fran
Townsend initially proposed the idea of a JTFCC to Governor
al-Suweidi during her February 2005 meeting, the Governor
expressed skepticism, asking how we found the current
relationship with the Central Bank "lacking" (ref B). Once
the proposal for the JTFCC had been passed to the UAEG,
Ambassador again discussed it with the Central Bank Governor
(ref C). Governor al-Suweidi said that the political
leadership would decide whether a JTFCC was established or
not. In order to obtain the support of the UAE's senior
leaders, Ambassador discussed the JTFCC with ruling family
members Sheikhs Abdullah bin Zayed, Hamdan bin Zayed, and
Mohammed bin Zayed. MinState for Foreign Affairs Sheikh
Hamdan instructed the Central Bank to form the committee, and
he specified which federal agencies were to participate.
Despite these instructions, the Central Bank Governor clearly
was not on board with the concept at the beginning of the
JTFCC meeting. Although the JTFCC got off to a rocky start,
Governor al-Suweidi acknowledged at the conclusion of the
lunch that there are subjects of mutual interest worth
discussing in a forum like this.


17. (S/NF) Next Steps. Ambassador will continue to work with
members of the ruling al-Nahyan family to maintain momentum
for the JTFCC. She will note disappointment with the fact
that no one from Dubai was present at the meeting (despite
Dubai being the financial center of the UAE) and that we were
unable to discuss charity regulation due to the absence of a
Ministry of Labor and Social Affairs representative.
Meanwhile, LEGAT and SIMO will put in the pipeline a series
of requests to liaison and law enforcement officials, framing
the requests "as a follow-up to the JTFCC..." This will set
the marker so that at the next JTFCC meeting we can measure
progress (or lack thereof) on actions and responses. If the
Governor continues to request "formalizing" the committee's
role and putting in "transparency," Embassy will explain that
this is to be a brainstorming and coordinating committee, and
that (as outlined in the JTFCC proposal paper) day-to-day
interaction between the USG and the UAEG will continue as it
did before.


18. (C) Embassy proposes that the second JTFCC meeting be
held in May, and that it should focus on enforcement, in
order to focus the discussion on actions taken rather than
lists of laws and regulations. Embassy suggests proposing
three subgroups for the JTFCC - Enforcement, Charities, and
Measures Against Financiers in order to focus the
participants and facilitate discussion by other UAEG
agencies.
SISON